Why Cheap Smartwatches Lack Tap-to-Pay & Is It Worth the Upgrade?

The return of Pebble, the smartwatch brand once celebrated for its Kickstarter success, highlights a persistent gap in the budget smartwatch market: the absence of tap-to-pay functionality. While companies like Nothing are gaining traction with affordable smartwatches – the CMF by Nothing, for example, offers a full suite of features for under $100 – many lack the ability to utilize Near Field Communication (NFC) for contactless payments.

Pebble first gained prominence with a record-breaking Kickstarter campaign in 2015, raising over $20 million for the Pebble Time smartwatch, according to reports from The Guardian and CNBC. The brand’s revival, as reported by TechCrunch, underscores the continued consumer interest in smartwatches, but also exposes the limitations of lower-cost options.

The issue isn’t NFC technology itself, which is inexpensive. Rather, the cost stems from security requirements and associated fees. Secure Elements, tamper-resistant chips crucial for storing payment information as secure tokens, add significant expense. Platforms like Google Wallet have stringent requirements, often necessitating the use of Wear OS, an operating system many budget smartwatches lack the processing power to run effectively.

“PCI DSS also requires a lot of updates and patches, something that many of these budget smartwatch companies just aren’t capable of keeping up with,” one industry observer noted. PCI DSS, or Payment Card Industry Data Security Standards, certification can cost hundreds of thousands of dollars, a prohibitive expense for companies operating on tight margins.

Some brands, like Amazfit, offer tap-to-pay through proprietary wallets, such as Zepp Pay, in certain regions. However, these systems often lack widespread acceptance, particularly in the United States. Zepp Pay, for instance, is not widely used in the US, limiting its practicality for American consumers.

An alternative for consumers seeking full functionality is to consider previous-generation flagship smartwatches. As newer models are released, older iterations often witness significant price reductions, bringing them within reach of budget-conscious buyers. However, this approach carries the risk of reduced battery life or eventual software obsolescence.

Despite the limitations, budget smartwatches continue to offer compelling value, providing features like heart rate monitoring, notification support and stylish designs at accessible price points. However, the absence of tap-to-pay remains a notable drawback for those accustomed to the convenience of contactless payments. For now, it appears consumers may need to continue relying on their smartphones for mobile payments, or accept the trade-offs inherent in choosing a more affordable smartwatch.